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Anticipating the outcome of the latest meeting of the Eurogroup, foreign banks and investors have proceeded towards minimizing their transactions with Greek banks and stock exchange companies.

This tactic has been in effect for weeks. However, the situation has further worsened in recent days due to fears of the outcome of negotiations and mainly of the reaction of the European Central Bank on Wednesday, when it will consider the issue of an even greater haircut of the guarantees through which Greek banks obtain liquidity from the Emergency Liquidity Assistance ELA.

The termination of transactions with Greek banks and stock exchange companies is due to fears of the complications that a liquidity incident or the imposition of restrictions on capital movement would cause.

The operations on the foreign exchange market are carried out with difficulty as well since contractors want Greek banks to ensure the necessary capital in order to complete them.

Simultaneously, foreign agencies bypass the local stock exchange companies to make direct transactions on the stock exchange. As the newspaper Kathimerini had revealed, the sharp ascent of Citigroup (which acts as depositary) from the 9th position in March to the 3rd in April among the companies listed on the stock exchange showed the trend that had formed over the past two months. Under that trend, foreign agencies (remote members) made direct transactions, totally cancelling the orders to the stock companies, subsidiaries of banks. The situation with the orders for transactions with foreign corporate bonds in recent days has been similar too. The isolation of Greek stock companies from the lines of foreign agencies is raising barriers to those investors who wish to purchase over-the-counter international but also Greek corporate bonds.

The concerns of foreign agencies are due to the fact that Greece’s financing problems in the near future will probably block their capital as a result of which they will be forced to change their strategy on the Athens Stock Exchange. Moreover, in the course of four consecutive months since the beginning of 2015, foreign portfolios have been constantly selling, turning into liquidity stocks worth 382.65 million euro. The direct operations of foreign agencies this April resulted in adding four companies to the top ten companies listed on the stock exchange. These were Citigroup (3rd position), Axia Ventures (6th position), UBS (8th position), Crédit Suisse (9th position) and Bank of America Merrill Lynch (12th position).

The authorities in Bulgaria, Albania, Romania, Serbia, Cyprus, Macedonia and Turkey have placed Greek banks under complete isolation in order to limit the effects of a possible Greek "incident" on their banking systems. The central banks of Bulgaria, Albania, Romania, Serbia, Cyprus, Macedonia and Turkey have obliged the subsidiary financial and credit institutions of Greek banks that are operating in the region to minimize their exposure to Greek risks (bonds, government securities, deposits in Greek banks, lending, etc.).